The Sky Is Falling on Chinese Corporations … The four largest banks in China, the banks that have to officially show big profits and profit growth no matter what because they’re an integral part not only of the government but also of China’s miraculous debt-driven expansion, are showing officially tolerated signs of increasing stress. – WolfStreet Dominant Social Theme:
There are no market risks in the fall.
Free-Market Analysis: The “fall” is aptly named when it comes to Wall Street’s prospects over the next three months. These three months, and especially October, have been most cruel to market performances, especially during occurrences of asset bubbles. Such bubbles tend to get pricked in, say … October. Will it happen again?
As much as any publication, we’ve called the market’s performance over the past year by observing the behavior of the power elite and mechanisms put in place to prop up equity markets – most notably monetary stimulation.
But it’s autumn, now, and October could certainly see a market event.
The question is whether or not an “event” will effectively end the current market rise. Chances are even if markets go down fast and hard, certain sectors will remain viable and profitable over time. Cannabis, for instance, is expanding as an industry worldwide and it’s hard to see that trend dissipating.
However, it is certainly true that there are many ways that markets can unravel. And at these heights, it only takes a push to reduce market valuations. There are plenty of places the push can come from. One such, as we’ve long pointed out, would be the public unraveling of China’s increasingly problematic economic “miracle.”
This post was published at The Daily Bell on September 05, 2014.
Follow on Twitter
Recent Comments